Several experiments in the operant conditioning literature have been reanalyzed in economic terms by viewing food, water, and other such rewards as commodities, and defining price as the amount of instrumental responding required per unit of the commodity. When total consumption is plotted as a function of price, whether the consumer be man, monkey, fish, or rat, the resulting laboratory demand curves show some striking similarities to demand curves based on data from the economic marketplace. One of the more important similarities is that the laboratory curves, like the marketplace curves, reflect the demand law of economics: As price increases, total consumption decreases. The many similarities suggest that it is feasible to study basic economic processes through laboratory experimentation with animals. Proposed here is a laboratory experiment with rats which will analyze the effects of a prior welfare payment, in the form of a limited number of free licks at the water tube, upon subsequent demand for water earned by pressing a lever for water. The theoretical basis of the work is a quantitative model derived from conservation theory (Allison, 1976) which has already been shown to predict several aspects of the economics of demand in their laboratory form. The model predicts that the prior welfare payment will shift the entire demand curve downward, but will have no effect on own price elasticity of demand for water. In other words, the prior welfare payment should decrease the amount of water earned subsequently, but the total amount earned should be equally responsive to variation in the price of water whether there has or has not been a prior welfare payment.